More Indictments in Philly Corruption Probe

PHILADELPHIA – A former city treasurer, a powerful city lawyer and 10 others were indicted Tuesday in a municipal corruption investigation that became public when a bugging device was discovered in the mayor's office.

It is the second round of indictments to come out of the investigation.

The latest indictment alleges that in 2002 and 2003, attorney Ronald A. White (search) gave cash and gifts worth tens of thousands of dollars to then-Treasurer Corey Kemp (search) to influence which financial services companies were selected to handle bond transactions for the city.

The gifts included a $10,350 deck for Kemp's house and a trip to the 2003 Super Bowl in San Diego, prosecutors said. White collected more than $630,000 in fees for his work on city bond deals during Kemp's tenure, prosecutors said.

The probe became public in October, when police conducting a security sweep discovered an FBI listening device in the City Hall office of Mayor John F. Street (search). Street has not been charged with any wrongdoing.

However, the mayor is mentioned several times in the indictment and U.S. Attorney Patrick Meehan (search) said Tuesday that Street "allowed White to wield the power, the corrupt power, that he did. That's not to say that the mayor committed a crime."

According to the indictment, Street told his staff that if White or companies he touted appeared to be qualified for city work, "the staff members should award the city business White sought and provide White with inside information ... regarding the operations of city agencies otherwise unavailable to the public."

Street said he never instructed anyone to give sensitive information to White or anyone else, and disavowed any knowledge of criminal activity by White or Kemp.

"I've been careful not to do anything wrong and I've tried very hard to guard against even the appearance of any impropriety," the mayor said.

"I said at the time that the bug was found in my office that I was very, very comfortable that I had done nothing wrong, and that they would find no corruption, no sex and no profanity, and I stand by those statements."

Kemp was charged with 46 counts while White faces 34 counts. The charges include conspiracy to commit honest services fraud, wire fraud and mail fraud. They were also charged with extortion for allegedly demanding that financial service firms and brokers seeking city work make donations to Street's re-election campaign. Each faces hundreds of years in prison if convicted on all counts.

Two Commerce Bank-Pennsylvania officials were also charged with making improper loans to Kemp, and two former J.P. Morgan executives were charged with arranging for White to submit an invoice for $50,000 for phantom legal work.

Also charged were a Detroit restaurant owner, an executive at the financial services firm Janney Montgomery Scott, a Reading pastor who allegedly conspired with Kemp to divert money from a church construction loan, an attorney accused of conspiring with Kemp in a fraud scheme, and a woman prosecutors identified as White's mistress.

Attorneys for White and Kemp did not immediately return calls. Commerce Bank, based in Cherry Hill, N.J., said in a statement it had suspended the employees and was cooperating with the investigation.

On June 2, a federal grand jury indicted five people, including the wife of a politically connected Muslim cleric, on fraud charges. They allegedly stole about $224,000 through a sham adult-education program.